"Foreign investors have been net buyers throughout the week. Institutional investors also bought back shares," said BNP Paribas Securities trading director Kazuhiro Nomura. Semiconductor issues attracted buyers following gains in the US Nasdaq composite, he added.

The technology-heavy index rose 42.27 points to 4,053.28 on Thursday.

Foreign investors were major buyers "on expectations that Japanese companies will achieve full recovery soon," said Sakura Friend Securities broker Koichi Kawata.

"The Tokyo market's buying sentiment is now very strong," he said, forecasting the Nikkei-225 to test 17,000 points next week. The Topix index of all issues on the exchange's first section rose 20.04 points to 1,531.28. Turnover on the major board totaled an estimated 614 million shares against Thursday's 696.7 million.

Traders said the market's upside was capped by profit-taking by brokerage dealers towards the weekend. Companies also continued to sell cross-shareholdings in other firms to balance their books for the April-September period. But, "the unwinding of cross-shareholdings has peaked," said Paribas' Nomura. Advancing issues outnumbered losers by 772 to 469 while 172 other issues were unchanged.

Internet investor Softbank Corp soared on reports that the government had approved the sale of the collapsed Nippon Credit Bank Ltd. (NCB) to its consortium on September 1, brokers said. Softbank closed up 1,990 yen or 16.6 percent at 13,990 yen, rising above 13,000 for the first time since July 5.

Nintendo Co fell 680 yen or 3.7 per cent to 17,940 after announcing the launch next year of two new games machines, an advanced home console called Gamecube and a successor to the wildly successful Game Boy. The launch was delayed from late this year.

The Gamecube will be going up against Sony's PlayStation2, Sega Enterprises Ltd.'s Dreamcast and Microsoft Corp.'s forthcoming X-Box. Nintendo's share price had plenty of room to rise, with the firm expected to consolidate its grip on the hand-held console market with Game Boy Advance, Tokyo Mitsubishi Securities senior analyst Nobumasa Morimoto said.

"Nintendo has an appropriate strategy with Game Boy, as it is seeking to develop pure games machines, thereby creating a friendly environment for software developers and for users," he said. Banks remained under pressure on the unwinding of cross-shareholdings, brokers said. Dai-Ichi Kangyo Bank Ltd fell 24 yen to 840 and Fuji Bank Ltd.

Euro shares climb in thin holiday trade London
Gains on Wall Street again pushed European stocks higher Friday, although trading was seasonally thin, and in London many dealers were already away from their desks ahead of a bank holiday weekend.

The FTSE-100 index was 60.9 points stronger at 6,617.9 and the techMARK rose 25.59 points to 3,711.67. In Germany, the DAX climbed to 7,255.62, 25.36 points higher, and in Paris the CAC-40 rose 67.86 points to 6,529.79.

Earlier in Asia the Nikkei 225 gained 240.51 points to 16,911.33, but Hong Kong's Hang Seng ended 202.96 points lower at 17,236.74.

On Wall Street overnight the Dow Jones Industrial Average ended the session 38.09 points higher at 11,182.74 and the technology-laden Nasdaq composite jumped 42.27 points to 4,053.28.

Following Thursday's unexpectedly weak data on US durable goods orders, the markets on Friday awaited the second estimate of US second-quarter gross domestic product as the latest indicator of whether the Federal Reserve has pitched interest rates at the appropriate level.

In what is expected to prove a more telling clue to sentiment, Federal Reserve Chairman Alan Greenspan also will deliver later in the day the opening speech at the Kansas City Federal Reserve conference on global economic integration.